November 4, 2005

 

CBOT Corn Review on Thursday: Thin gains; supported by soy complex

 

 

Corn futures at the Chicago Board of Trade ended Thursday at slightly higher levels, benefiting from spillover support from higher soy meal and soybean prices in modest trade, sources said.

 

December corn edged up 1/4 cent to US$1.96 1/4 per bushel, March corn rose 1/2 cent to US$2.10 1/2, and May corn also gained 1/2 cent to US$2.18 1/2 per bushel.

 

Soy products finished the session sharply higher. Soymeal futures surged, underpinned by strong export sales and technical buying. The December contract rose US$4.40 to US$178.30 per short tonne. A late technical rally pushed soy oil futures higher with the December contract ending 69 points to 23.53 cents per pound.

 

Soybean futures also ended at strong levels on technical buying, a firming cash market and ideas that a seasonal rally is close at hand, sources said. The January contract gained 18 1/4 cents to US$5.91 3/4 cents per bushel.

 

Corn futures were modestly higher for much of the day until light selling interest late in the session trimmed the advances.

 

"There's still no reason to move it higher or lower," a commission house broker said. The market is waiting on next week's report to hopefully provide some reasons, he added.

 

Weekly export sales were 1.218 million metric tonnes, above the high end of the range of estimates, but had little impact as the sales were termed "a typical number for this time of year," noted one trader.

 

"The corn market is pretty close to its seasonal lows if it's not already there," said Shawn McCambridge, senior grain analyst with Prudential Financial. The risk-reward ratio is beginning to favor trading from the long side, he added. The harvest is wrapping up and the cash market is beginning to stir, he added.

 

Informa Economics released their estimates of production and yield before the opening with production pegged at 10.979 billion bushels and a yield of 147.7 bushels per acre.

 

Floor analysts noted that although the figures were above the U.S. Department of Agriculture's October estimates, they were in line with FC Stonnee's estimate earlier in the week and had little impact on the market.

 

The USDA is scheduled to release the November crop production and supply/demand reports on Nov. 10.

 

Buyers on Thursday included ADM buying 1,000 March, UBS buying 1,400 December, ABN Amro buying 500 December and Fimat buying 200 December.

 

Sellers Thursday included ABN Amro selling 500 December, Tenco selling 1,000 December, Calyon Financial selling 200 December, Fimat selling 200 December and Rand Financial selling 100 December.

 

Commodity fund buying was estimated at 2,100 contracts.

 

Oat futures finished with good-size gains as technical and fund buying lifted prices higher, with the December contract up 4 1/4 cents to US$1.66 1/4 per bushel.

 

Ethanol futures settled mostly higher. The January contract did not trade and settled unchanged at US$1.91 1/2 per gallon.